Problems with encoding 360 VR videos, VR video looks very low quality

I am trying to encode sequence of 360 renderings from the 3d application and no matter what codec or bitrate I use the quality of the VR video is very low.

The sequence looks good and sharp in the Premieres VR Display Mode but when encoded it looks really low rezolution with high pixelation.

The video itself is behaving as expected as in you can view around as it plays.

The original sequence of images was rendered at 8k and the intended size of the video was HD, there is no missmatch in source vs export resolution.

Attached image is showing the difference between the source on the left and encoded video on the right

Any help in resolving this issue is greatly appreciated.

Thanks!